HDBank receives $70 mln loan from IFC to boost climate finance

With the loan, HDBank expects to expand its climate finance portfolio to more than $800 million by 2025, resulting in a reduction of over 54,000 tons of carbon dioxide emissions per year from 2021-2025 and thereafter, IFC said in a statement.  

“Going forward, HDBank sees climate finance as a driving force, especially with countries across the world trying to adapt and mitigate impacts of climate change while ensuring sustainable economic growth,” said Pham Quoc Thanh, HDBank Chief Executive Officer.

“IFC’s long-term financing and expertise will help accelerate our evolving endeavors in climate business with a structured approach, allowing us to expand our climate portfolio by developing climate-targeted financial products and services that are aligned with global best practices,” he added.

As a signatory to the COP21 Paris Agreement, Vietnam aims to double its renewable energy generation capacity—excluding hydropower—over the next 10 years to meet the increasing demand for power driven by robust economic growth and a growing population.

This will help keep the country on track to reduce its greenhouse-gas (GHG) emissions by at least nine percent by 2030 and further enable Vietnam to reach its recent COP26 commitment to net-zero carbon emissions by 2050.

Currently, 50 percent of Vietnam’s electricity comes from coal, making the need to develop a greener, lower-carbon economy—including necessary financing—crucial for the country to meet its reduced carbon emission commitments.

One of the top GHG emitters globally, Vietnam’s overall climate-smart investment potential is estimated at $753 billion by 2030, of which up to $59 billion is in the renewable energy sector.

However, the share of climate financing—as a percentage of total bank lending—in Vietnam was just about five percent or $10.3 billion as of 2016, indicating a significant climate finance gap.

Climate change is a strategic pillar of IFC’s engagement in Vietnam. The aim is to catalyze finance and promote private sector solutions for climate action. IFC is supporting four Vietnamese commercial banks to expand their climate finance portfolios to $1.2 billion by 2025.

As part of the World Bank Group Climate Change Action Plan 2021-2025, IFC and the World Bank are developing a new diagnostic tool—the Country Climate and Development Report (CCDR)—to help Vietnam align its climate action with broader development efforts.

The tool will identify and prioritize opportunities for high-impact climate action to inform future World Bank Group climate engagements and investments over the next five years.